Oatly AB v Dairy UK Ltd

Hearing date: 5 October 2023

Approved Judgment

Introduction

This judgment arises from an appeal against a decision of the Intellectual Property Office (the IPO) dated 17 January 2023 (the Decision) that the UK trade mark registration no. 3 445 440 for the word mark POST MILK GENERATION (the Mark) ought to be declared invalid for the goods registered in classes 29, 30 and 32 of the specification on the grounds that the Mark offended against section 3(4) of the Trade Marks Act 1994 (the Act). Specifically, the Hearing Officer found that the Mark was prohibited by reason of Article 78(2) of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products (the Regulation) and Part III of Annex VII thereto addressing the use of the term “milk” in relation to products that are not mammary secretions.

Background

On 19 November 2019, the Appellant filed an application ( Application) for what became the Mark for a variety of goods in different classes, namely:-

Class 25 T-shirts.

Class 29 Oat-based drinks as milk substitutes; oat-based yoghurt substitute; oat-based crème fraiche; oat-based cooking cream and creamer.

Class 30 Oat-based vanilla sauce and oat-based vanilla custard; oat-based ice cream; oat-based food spread.

Class 32 Oat-based natural energy drinks; oat-based breakfast drinks; oat-based fruit drink beverages; oat-based smoothie beverages.

On 25 November 2019, the IPO examined the Application, finding it to be inherently registrable, being distinctive, not descriptive, of the relevant goods. The IPO raised one issue viz the transfer of the specific goods “oat-based food spread” from Class 29 to Class 30. That issue was addressed and the Application accepted by the IPO and published in the Trade Marks Journal on 31 January 2020 for the purpose of the two months opposition period. No opposition was lodged and the registration certificate was issued on 8 August 2020. In the meantime, however, the Respondent's solicitors, DWF Law LLP ( DWF), had written to the IPO on 24 March 2020 with observations on the Application, albeit the letter was apparently mislaid at that time. DWF raised objections based upon sections 3(3)(b) and (4) of the Act which provide that:-

“3(3) A trade mark shall not be registered if it is:-

(a) ………………

(b) of such a nature as to deceive the public (for instance as to the nature, quality or geographical origin of the goods or service).

3(4) A trade mark shall not be registered if or to the extent that its use is prohibited in the United Kingdom by any enactment or rule of law.”

The relevant enactment relied on by the Respondent as prohibiting the use of the Mark is the Regulation which defines “ milk” in point 1 of Part III of Annex VII as “ the normal mammary secretion” and continues at points 5 and 6 in the following terms:-

“5. The designations referred to in points 1, 2 and 3 may not be used for any product other than those referred to in that point.

However, this provision shall not apply to the designation of products the exact nature of which is clear from traditional usage and/ or when the designations are clearly used to describe a characteristic quality of the product.

6. In respect of a product other than those described in points 1, 2 and 3 of this Part, no label, commercial document, publicity material or any form of advertising as defined in Article 2 of Council Directive 2006/114/EC (1) or any form of presentation may be used which claims, implies or suggests that the product is a dairy product.

However, in respect of a product which contains milk or milk products, the designation ‘milk’ or the designations referred to in the second subparagraph of point 2 of this Part may be used only to describe the basic raw materials and to list the ingredients in accordance with Directive 2003/13/EC or Regulation (EU) No 1169/2011.”

5. After the DWF letter re-surfaced, the IPO indicated in a letter dated 21 October 2020 that it was minded to “ rescind” the registration pursuant to Rule 74(2)(b) of the Trade Mark Rules 2008 and to refuse the Application under section 3(4) of the Act for the majority of the goods in classes 29, 20 and 32. 1 Despite written submissions filed by the Appellant on 18 December 2020, this objection was provisionally upheld in a letter dated 4 January 2021.

6. After an ex parte hearing on 28 January 2021, the provisional refusal was confirmed. However, after a request by the Appellant for full written reasons, the objection was waived in a letter from the IPO dated 19 April 2021 and the Mark therefore proceeded to registration for a second time on 23 April 2021. The Respondent then filed an application for a declaration of invalidity on 23 November 2021 based on both ss.3(3)(b) and (4) of the Act against all the goods for which the Mark had been registered.

The IPO's decision

7. In the Decision (at [32]–[34]), the Hearing Officer dismissed the objection based on s.3(3)(b) on the ground that the Mark did not deceive, nor create a sufficiently serious risk of deception of, members of the general public. The Appellant places reliance on this appeal on this aspect of the Decision, noting that, as a consequence, it has been found that the use of the Mark will not mislead consumers, either directly or indirectly, into believing that any product in relation to which the Mark is used is a dairy product. No appeal has been made against that finding.

8. The Appellant also places reliance in this context on the Hearing Officer's finding (at [33]) that “ the average consumer will view the mark as an ironic way of saying its goods have moved on from conventional milk and are for consumers of a ‘post-milk generation’; i.e. those who no longer consume dairy milk.” The Appellant says that the Mark therefore alludes to the attitudes of a potential consumer rather than containing any direct or indirect allusion to any characteristic of the goods themselves and, as such, the Mark is distinctive of, indicates a unique trade source for, and is not descriptive of, the goods for which it is registered.

9. Despite these findings related to the consumer's perception of the Mark, the Hearing Officer upheld (at [28]) the objection based on s.3(4) against all the goods in classes 29, 30 and 32, 2 her key findings (at [25]–[28]) being:-

“25. It seems to me that point 5 must be applicable because (particularly) point 1 refers to the use of the term ‘milk’. It does not become inapplicable because the goods themselves are not milk: there is no distinction in the wording of point 5 between use in a trade mark (which is for marketing) and use as a description of goods. ‘Milk’ appears in the trade mark and point 5 states that ‘milk’ may not be used for any product which is not milk or a milk product (as set out in points 1, 2 and 3).

26. Milk is a designation in points 1, 2 and 3 of the Annex. Point 5 states that ‘milk’ cannot be used for products which are not milk, and Article 78(2) covers use in marketing, including trade marks. Oatly's position is that for goods or products which are not milk, point 6 gets it home. That would mean that a trade mark which includes ‘milk’ for goods which are not milk, and contravenes point 5, might still be acceptable if the mark doesn't claim, imply or suggest that it is a dairy product. However, point 6 states “[in] respect of a product other than those described in points 1, 2 and 3 of this Part, no label, commercial document, publicity material or any form of advertising as defined in Article 2 of Council Directive 2006/114/EC (1) or any form of presentation may be used which claims, implies or suggests that the product is a dairy product.” The purpose of point 5 is to catch the use of ‘milk’ (and other milk product terms) in the marketing of non-milk products. The purpose of point 6 must be to catch marketing for non-dairy products (i.e. which are not specified in points 1, 2 or 3) that do not use the word ‘milk’ or other protected names, such as ‘butter’, but nevertheless would be linked with dairy products (such as a device of a cow). The contested mark does not get as far as point 6 because it contravenes point 5: it contains the word ‘milk’ which is a designation referred to in points 1, 2 and 3 and which can only be used for goods referred to in those points.

27. Furthermore, the answer that the CJEU gave in the TofuTown case was that the term ‘milk’ was precluded from being used to designate purely plant-based products in marketing or advertising, which must include use in trade marks which are used in marketing, even where the word ‘milk’ is expanded upon by clarifying or descriptive terms. That could include the use of milk as part of a phrase comprising the trade mark.

28. The mark contains the word ‘milk’ and the goods are not milk. The wording of point 5 is strict. The use of ‘milk’ is prohibited for non-milk products under point 5 of the Annex, regardless of how the mark as a whole may be viewed by consumers, which is not a consideration under point 5. I find that the section 3(4) ground succeeds in relation to the goods in classes 29, 30 and 32. However, the ground fails in respect of the class 25 goods: T-shirts. The purpose of the Regulation is stated to be establishing a common...